Why does competition matter in regulated sectors?

Competition is about increasing choice and efficiency to benefit consumers and make the economy more productive. This also applies to sectors which in many countries have been liberalised (such as electricity, water, railways and telecoms), which are subject to regulation (banking and other financial services) or where the government plays an important role (healthcare, education and local public services).

These sectors can raise complex policy challenges, for example:

How to make sure that the behaviour of previous monopolist firms does not stifle competition in recently liberalised sectors?

Is there a conflict between introducing competition and security of supply in the energy sector?

What is the best way to ensure that consumers receive fair treatment when buying complex financial products – without limiting competition between providers?

How should enforcers deal with digital markets as more and more consumers buy products and services online, listen to music and surf the Internet using mobile devices?

The OECD competition work in regulated sectors

The Competition Committee’s work in this area focuses on improving economic regulation and proposing the appropriate policies for competition to deliver more benefits for consumers and growth. The Best Practice Roundtables identify key issues in each sector and present the latest developments to address those problems. Many roundtable reports are also a valuable resource for advocating policy reform in a sector, for example by surveying regulations and policies in different countries. They also cover cross-cutting thematic issues, such as the role of behavioural economics in competition policy and price volatility in the case of commodities.

In addition, the OECD on occasion works with member countries to promote reform and foster its competitiveness, most recently in Mexico. Sectoral reports cover the pharmaceutical industry, banking, transportation and telecommunications.

For further information on the OECD work related to liberalisation and interventions in regulated sectors, please contact us at DAFCOMPContact@oecd.org.

The OECD Competition Assessment Toolkit was designed to help governments eliminate barriers to competition through a method that identifies unnecessary restraints on market activities and develops alternative, less restrictive measures that still achieve government policy objectives.

This report sets out the experiences of OECD countries in applying the concept of market definition in the telecommunications sector, with a particular focus on triple- and quadruple-play services. Read more